Business Asset Disposal Relief: selling your business before April 2027, and what changes if you move to Dubai

What the 28 October 2026 Budget changed

• The lifetime limit halves. Business Asset Disposal Relief (BADR) lets you pay a lower rate of capital gains tax when you sell all or part of your business. Its lifetime limit falls from £1,000,000 to £500,000 for sales on or after 6 April 2027. [1]
• The rate stays at 18%. That's the BADR rate for sales since 6 April
  2026. The normal higher rate of capital gains tax is 24%. [3][5]
• Earlier claims still count. The limit covers all your BADR claims over your lifetime, and the limit that applies is the one in force when you sell. So gains you've already claimed BADR on count against the new, lower limit. [3][4]
• Contracts already signed get special treatment. The government says "special provisions" will cover contracts entered into before 6 April 2027 that haven't completed. The detail isn't published yet. [1]
• It isn't law yet. It will be put into law through the Finance Bill 2026–27. [1]

The Chancellor said the change means no change for 3 in 4 people who claim BADR. [2]

What it costs you, in numbers

Take someone who pays the higher rate of tax, has a £1 million qualifying gain and has never claimed BADR: [1][3][5]

The difference is £30,000. That's also the most the cut can cost anyone on the higher rate: 6% on the £500,000 that loses the relief. This simple example ignores the annual tax-free allowance, your costs and any losses. [1][3][5]

For an owner who is also leaving the UK, the timing of the sale can matter more: a sale after becoming non-UK resident can fall outside UK capital gains tax altogether (see below).

The date that counts is when the contract is signed

For capital gains tax, a sale normally happens when the contract is made, not when the money arrives. If the contract has conditions, it happens when the conditions are met. [6]

So "selling before April 2027" means having an unconditional contract in place before 6 April 2027. A sale that starts in January 2027 leaves about 3 months to reach an unconditional contract. The special rules for contracts signed before that date may help, but don't plan on them until the detail is published. [1][6]

Who qualifies for Business Asset Disposal Relief

For shares in your own company, these must be true for at least 2 years up to the date you sell: [3]

• You hold at least 5% of the shares and 5% of the voting rights.
• You're entitled to at least 5% of the profits and assets, or of the sale proceeds.
• You're an employee or officer of the company, or of another company in the same group.
• The company is a trading company, or the holding company of a trading group. Mainly holding investments doesn't count.

Sole traders and business partners have similar 2-year rules. [3]

If your shares came from an EMI scheme

Enterprise Management Incentive (EMI) is the government-backed share option scheme many growing companies use to reward staff. If your shares came from EMI options, you don't need to hold 5% of the company. Instead, you must have: [3]

• bought the shares after 5 April 2013, and
• been granted the option to buy them at least 2 years before you sell.

The other conditions still apply: you must work for the company, and it must be a trading company. [3] This matters for senior staff in a sale, and for founders who took part of their stake through EMI.

How to claim the relief

BADR isn't applied automatically. You claim it, either on your Self Assessment tax return or by completing Section A of HMRC's helpsheet HS275. [3] In practice, your UK tax adviser makes the claim when they file your return.

The deadline is the first anniversary of the 31 January after the end of the tax year in which you sell, so almost 2 years after that tax year ends: [3][7]

Without a claim, the gain is taxed at the normal rate.

The new Founders' Relief: why some sellers may wait

The Budget also announced a new Founders' Relief. It gives a 10% rate of capital gains tax on up to £10 million of lifetime gains per person, for sales from 6 April 2027. [8][9]

It's aimed at founders and early investors in high-growth, innovative UK companies. [1][8] The government's proposed conditions include: [8]

• you held at least 25% of the company's ordinary shares when its trade, or the preparation for it, began
• you held the shares for at least 5 tax years before the sale
• you were UK resident for at least 5 tax years in a row before the sale
• the company had turnover of at least £10 million and at least 15 full-time equivalent staff in the year before the sale, and meets growth or research spending tests

The £10 million applies per person, so more than one founder of the same company could claim it. BADR claims made from 6 April 2027 reduce it. [8]

The conditions aren't final. The government is consulting on how they work in practice until 30 November 2026, then legislating through the Finance Bill 2026–27. [1][9]

If your company might qualify, waiting could mean 10% instead of 18%. If it won't, the £1 million BADR limit applies only to sales before 6 April 2027. Because of the residence condition, Founders' Relief is designed for people who have lived in the UK for the 5 tax years before they sell. [8]

If you're moving to Dubai: selling before or after you leave

If you sell while you're UK resident, UK capital gains tax applies, with BADR if you qualify.

If you sell after you've become non-UK resident, you don't normally pay UK capital gains tax on selling shares. The main exception is UK land and property, including shares in a company that gets at least 75% of its value from UK land, if you hold 25% or more of it. [10][11] The UAE doesn't levy income tax on individuals. The narrow exception is corporate tax for people running a business in their own name with turnover above AED 1 million a year. [12][13]

3 conditions apply:

1. You must genuinely stop being UK resident. The Statutory Residence Test turns on day counts (16, 46, 91 and 183 days) and your ties to the UK. A day usually counts if you're in the UK at midnight. [14][15]
2. The 5-year rule. If you were UK resident in at least 4 of the 7 tax years before you left, and you come back after 5 years or less, gains on assets you owned when you left are taxed in the year you return. The time away must be more than 5 years. With no split year, that means 6 full tax years away. [14][16]
3. Since 6 April 2026, the rule reaches further. The 5-year rule already taxed dividends from your own company on your return. Dividends paid out of profits the company made after you left were an exception. For people returning on or after 6 April 2026, that exception has gone. [17]

There is no UK exit tax for individuals. One was discussed in 2025 but hasn't been introduced, and it isn't in this Budget. [1][10][19]

Inheritance tax. UK inheritance tax can follow your worldwide assets for 3 to 10 years after you leave, depending on how long you lived in the UK. [18]

The 2 options:

• Sell now, as a UK resident. You get certainty, and the £1 million BADR limit if you sign an unconditional contract in time. [1][6]
• Move first, stay away for more than 5 years, then sell. There may be no UK capital gains tax, but you need a real move, a buyer willing to wait, and no plans to come home early.

The decision depends on your family, your buyer, your timetable and how long you intend to stay in Dubai, so the tax, legal and move timetables need to be set together.

Before you decide: 7 questions to answer

1. What's my likely gain, and how much of my £1 million BADR limit have I already used?
2. Can I have an unconditional contract signed before 6 April 2027?
3. Could my company qualify for Founders' Relief? Is it worth waiting for the rules?
4. Am I planning to leave the UK, and when, in tax-year terms?
5. Could I genuinely stay away for more than 5 years?
6. Does my company own UK property, or pay dividends I'd want while abroad?
7. Where will the sale money go, and in whose name? Who will look after it?

How Marlborough Gulf helps

What we do: We put the whole plan in one place:

• the sale timetable
• the move to Dubai: residency, a company if you need one, and preparing your bank account application
• how the family's wealth will be held afterwards

One point of contact at Marlborough Gulf coordinates everyone involved. You appoint and contract with each specialist directly.

What our partners do:

• A UK tax adviser gives the formal UK tax advice and handles your tax returns.
• A corporate lawyer runs the sale contract.
• Licensed wealth managers and banks look after the proceeds.

Marlborough Gulf does not give investment, pension or insurance advice. Regulated services are provided by licensed firms, who contract with you directly.

Questions people ask

What is Business Asset Disposal Relief?

It's a UK tax relief that lowers the capital gains tax you pay when you sell all or part of your business, or shares in your own trading company. It was previously called Entrepreneurs' Relief. [3][4]

How much is Business Asset Disposal Relief? Is it still 10%?

No. The rate was 10% for sales up to 5 April 2025, 14% for sales in the 2025–26 tax year, and has been 18% since 6 April 2026. [3] The normal higher rate is 24%, so the relief saves 6p on every £1 of qualifying gain. [3][5]

How does Business Asset Disposal Relief work?

The qualifying part of your gain is taxed at 18% instead of the normal rate. For a higher-rate taxpayer with a £400,000 gain, that means £72,000 of tax rather than £96,000, a saving of £24,000 (before the annual tax-free allowance and costs). [3][5]

Who qualifies for Business Asset Disposal Relief?

Sole traders and business partners who have owned the business for at least 2 years, and shareholders in a limited company who work for it and hold at least 5% of its shares and voting rights. The company must be a trading company, not mainly an investment company. Shares from an EMI scheme have their own rules (see above). [3]

What is the 2-year rule?

The conditions must all be met for at least 2 years up to the date you sell. If you're closing your business rather than selling it, the same conditions apply, and you must dispose of the business assets within 3 years. [3]

What is the lifetime limit?

£1 million of gains over your lifetime, falling to £500,000 for sales on or after 6 April 2027. [1][3] Earlier claims count against it, so someone who has already used £600,000 will have nothing left for sales after that date. [4]

Is Business Asset Disposal Relief being abolished?

No. The 28 October 2026 Budget halves the lifetime limit from 6 April 2027 and announced no change to the 18% rate. [1][3] Contracts entered into before that date but not yet completed will get special treatment; the detail isn't published yet. [1]

How do I claim it on my Self Assessment tax return?

Claim it on the return for the tax year you sell in, or complete Section A of HMRC's helpsheet HS275. The deadline is 31 January almost 2 years after that tax year ends, for example 31 January 2029 for a sale between 6 April 2026 and 5 April 2027. [3][7]

Can I get Business Asset Disposal Relief on EMI shares?

Yes, without needing 5% of the company, if you bought the shares after 5 April 2013 and were granted the option at least 2 years before you sell. You must still work for the company, and it must be a trading company. [3]

Do you pay capital gains tax when you sell a business after moving abroad?

Usually not on shares, once you've genuinely become non-UK resident and stay away for more than 5 years. UK property, and shares in companies that get at least 75% of their value from UK land, can still be taxed. [10][11][14]